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The market capitalisation lost Tk 629 crore during the last week as the share prices seesawed on the Dhaka Stock Exchange.
   The DSE market capitalisation was Tk 27,270 crore on Thursday which was Tk 27,859 crore on the last trading day of the previous week.
   The average turnover and stock indices on the DSE also declined last week compared to the previous week.
   The DSE daily average turnover declined by 36.78 per cent to Tk 30.11 crore in last week, while the figure was Tk 47.62 crore in the previous week.
   The DSE general index lost 35.47 points or 2.27 per cent in the last week to close at 1527.06 on Thursday, while benchmark DSE20 shed 27.26 points or 2.02 per cent.
   Bear dominated the week as the index decreased in the first three trading days of the week while gained only on Thursday. DSE remained closed on Monday due to Durga Puja.
   ‘Stock prices declined in the three days of the just concluded week as the uncertainties over the dialogue over electoral reforms dampened the investors’ mood’, said Moin Al Kashem, a stock market analyst.
   However, stocks gained on the last day of the week on the start of the much-awaited dialogue to end the political impasse, he said.
   ‘Turnover on the bourse declined due to liquidity crisis originated from the Bangladesh Bank’s recent mopping up of a big chunk of money from the money market through banking instruments’, insiders said.
   A stock broker, however said a section of investors pulled out funds from the market with a view to investing in the Power Grid Company Bangladesh, scheduled to be debuted by the next Monday to raise capital of about Tk 91.09 crore from country’s capital market.
   He said the market witnessed shortage of funds at the institutional buyers’ level.
   Inside sources, however, said some negative speculations over the future developments at political arena kept the institutional investors less active throughout the week.
   The Dhaka Electric Supply Company topped the turnover leaders of the last week with total sales of Tk 8.69 crore which was 7.21 per cent of the total turnover of the bourse of the week.
   Other turnover leaders, according to their position, were: Pubali Bank, Summit Power, Bextex, City Bank, Lafarge Surma Cement, Square Pharmaceuticals, AB Bank, IFIC Bank and Rupali Bank.
   Of the total transactions valued at Tk 120.42 crore in the week, A category shares got 78.96 per cent, B category 5.48 per cent, G category 4.11 per cent and Z category 11.45 per cent.
   Pharmaco International and Southeast Bank topped the gainers and losers lists respectively. Pharmaco International gained 34.29 per cent in its share prices while Southeast Bank witnessed 23.56 per cent fall.

Commercial banks have been asked to inform the central bank about the status of government securities they hold, mentioning whether those are meant for mandatory liquidity deposits or for trade.
   The central bank issued the instruction last month for ensuring more transparency in market based revaluation of the treasury bills and bonds, held by the commercial banks.
   The Bangladesh Bank introduced the market-based valuation system of treasury bills and bonds in last October.
   Securities that banks hold for the fulfilment of the statutory liquidity requirement are known as ‘held for maturity’ or ‘investment securities.’
   Treasury bills and bonds held by bank in excess of SLR are treated as trading based dealing securities.
   According to the new instructions, issued to clarify previous order, the central bank has restricted repo (repurchase agreement) of the government securities held for trade.
   Although the banks are allowed to hold more investment securities than what they need, there should be different revaluation.
   The present value of the securities purchased from secondary market needs to be determined by using original yield and then included in the ‘held for maturity’ portion.
   According to the new instructions, all the banks have to submit the statements of their holdings of the government securities as on 31st December by 15 January of next year to the off-site supervision department of the central bank.
   Banks have to prepare statements in prescribed formats sent by the central bank and both the investment and dealing securities have to be reported.
   The central bank also said that monthly statement of the securities held for maturity have to be valued every day and submitted to the central bank along with other securities kept for SLR within the first 10 days of next month.
   Inter-transfer of government securities between HTM and HFT is allowed only within first two months of a calendar year with prior approval of the banks’ boards. For the foreign banks, approval of the chief executives is a must.
   Moreover, only 10 per cent of the government securities can be transferred between HTM and HTF. In each transfer, present value of the securities by using original yield should be considered.
   The banks have to show the gain or loss due to such revaluation in the profit and loss accounts of the concerned period.

‘Davos for Women’, the second annual Women’s Forum for the Economy and Society has opened, aiming to spotlight female viewpoints and bring down barriers to top jobs for women.
   The three-day forum, entitled ‘Women’s new responsibility for improving our societies’, brings together on the Normandy coast some 800 business leaders, political players, academics, scientists and artists from more than 61 countries from Korea to Kuwait.
   A recent study of the top 100 businesses in North America, Asia and Europe, commissioned by the forum, showed that women fill less than 10 per cent of board-of-director and executive committee seats.
   Organisers say the forum which opened Thursday is not a feminist movement or a passing fad, but a practical move to create networks of influence to help women move into better jobs.
   ‘It’s not at all a fashionable trend, it’s a deep and lasting evolution,’ President and founder of the forum Aude Zieseniss de Thuin told AFP.
   The first forum, with more than 500 participants, took place last year and a third is already planned for 2007.
   Some 20 per cent of this year’s participants are male, including top business leaders Carlos Ghosn, CEO of Renault and Didier Quillot, Chairman and CEO of Orange France.
   ‘Their aim is to listen to women because we don’t hear them very often in decision-making assemblies,’ De Thuin said. ‘They’re also looking to recruit women.’
   ‘Women bring different skills, different reactions, and a different point of view to the workplace,’ Bernard Fornas, President and CEO of Cartier, told AFP.
   Fornas joined De Thuin to launch a new international prize for female entrepreneurs, the Cartier Woman’s Initiative Awards, due to select 15 regional finalists from a study of short business plans from around the world, and to be awarded at next year’s forum.
   Host country France is seen as a spearhead for equality in some areas, with women taking half of university places and celebrated female role models such as Laurence Parisot, head of the Medef employers’ association, Anne Lauvergeon, chairman of Areva nuclear company, and likely Socialist presidential candidate Segolene Royal.

The telecoms regulator BTRC has recently announced that it will grant licences to the incumbent providers of VoIP technology that makes the overseas phone calls possible a lot cheaper. One might well relish the prospect of calling overseas at the rate similar to what it takes now to make a local call once the private sector launches competitive Voice over Internet Protocol technology services.
   Wait! That’s unlikely to happen as the consumers’ benefit is nonexistent in the VoIP license. The regulator rather intends to firm up the state-owned BTTB’s monopoly over the international voice business. In other words, the government wants to keep the ailing BTTB artificially alive through VoIP licensing.
   The Clause 5.4 of the licence compels the private operators to use the BTTB’s VoIP platforms. Recently, the prime minister turned down the US$3.6 million VoIP platform purchase proposal on the grounds of irregularities. But an apparently undaunted BTTB remains keen to slice off public funds in the name of re-tendering its VoIP platform project.
   The private operators, according to the BTRC’s licence document, will be connected with ‘BTTB’s submarine cable and or BTTB’s satellite, for international VOIP service’. It demonstrates BTRC’s absolute ignorance about the fundamental operating issues of international telecoms circuits.
   Imagine a country’s road and rail networks without bridges over the major rivers. Travelling from one place to another becomes painstakingly longer if one has had to use the ferries. Similarly, instead of media gateway equipment or bridges, few enterprise routers or ferries run the BTTB’s network.
   Ignoring this gross technical drawback, the regulator dictates, ‘The (VOIP) licensee will conclude an operational agreement with BTTB which will inter alia provide for payment to BTTB by the licensee for use of BTTB’s facilities.’
   This move will deal a massive blow to the private VoIP operators. Because the BTTB never guarantees how long its submarine cable or satellite link remains functional. The VoIP operators will not get compensated for the beyond-permissible downtime either. Yet they have to make six months’ down payment to start using the BTTB’s defective network!
   Therefore, platform or no platform, the BTTB’s unreliable infrastructure defies all logic to be the lifeline of the VoIP businesses. The VoIP operators have to deploy respective international gateway, regardless of what the BTRC says.
   The regulator’s prejudice for the BTTB is an open secret. It has been allowing the BTTB to pump VoIP calls using the 012 access code since 2003 without any licence. It has, undoubtedly, relieved the BTTB subscribers of exorbitant overseas tariff. Simultaneously, such regulatory concession has injected uncontrollable arrogance into the BTTB’s institutional ignorance. That’s why the state-owned operator now dares to behave like a regulator.
   Clause 10.2 of the BTTB’s submarine cable capacity sales agreement says: ‘BTTB shall have the right to apply monitoring facility over any service extended to IPLC (International Private Leased Circuit).’
   The next clause proclaims, ‘BTTB will have the right of unrestricted access for monitoring & inspection of the premises of the IPLC customer, without prior notice or delay, for obtaining data/current configurations of the equipment installed.’
   The telecoms ministry and the BTRC have vetted these unlawful demands of BTTB.
   It is illegal because the Sections 61, 62, 63 and 64 of the telecoms law have explicitly empowered only the BTRC, a first class magistrate or a metropolitan magistrate to conduct any ‘inspection and compulsory enforcement.’ So, the BTTB lacks any lawful authority to adjudicate the industry.
   The telecoms ministry and the BTRC have also ignored the fact that the BTTB is simply nothing but an operator like others in the market governed by the common law. Evidently, the extra-regulatory indulgences have made the BTTB more defiant to stipulate the libelous terms in its submarine cable’s capacity sales.
   The government has carefully embedded these asymmetric provisions in VoIP licence to establish a prolonged monopoly in the country’s international telecoms business. Once the BTTB is corporatised and its shares are off-loaded, the public telecoms monopoly will get more monstrous with reinforced private sector profile.
   Offshore giants, powered by multibillion-dollars capital, are likely to take over the BTTB, as has been the case with the recent privatisation of the PTCL, Pakistan’s public telecoms entity. There is absolutely nothing wrong about it. However, unlike Pakistan, the BTTB’s acquirer will inherit its historical monopoly over the international voice gateway. Subsequently, the preachers of reforms and even competition will suffer from amnesia. Bilateral and multilateral lenders, including the Breton Woods institutions, will aim their political guns at our government’s head to protect the newly converted private sector monopoly as they did for WorldTel, where Bangladesh government owns 10 percent stakes.
   This private sector international Trojan horse entered Bangladesh’s telecoms market with a monopolistic 300,000-lines fixed-phone licence in Dhaka at the twilight of previous government.
   The UN affiliate, International Telecommunications Union, backs WorldTel. It is yet to launch services while other fixed-phone operators’ entry into Dhaka remains uncertain due to the legal tangles created by this foreign-owned private sector monopoly. The present government, also at its fag end, is paving the way for another debacle to happen through the VoIP licence.
   It is imperative to foil the move by lawfully splitting the BTTB’s overseas telecoms division. It shouldn’t be a tough ask since subsection C under Section 49 of the telecoms law prohibits the BTTB’s ownership over the submarine cable or satellite link in the first place.
   The deterrence would mean the BTTB can no longer exclusively own and operate the overseas telecoms facilities. According to the law, all public and private operators deserve equitable access to the BTTB’s yet-to-be segregated overseas telecoms unit. The regulator has to ensure fast enforcement of this legal provision while processing the VoIP licence applications.
   Otherwise, despite paying hefty amounts in licence fees, the private VoIP operators will be primarily enslaved thanks to the state-owned telecoms watchdog’s eccentricity. Ultimately, they will sink into the quicksand of uncertainty as have the fixed-phone operators with regards to the Dhaka zone licence.
   They will bid goodbye to good luck, for good.

Rajshahi Krishi Unnayan Bank has disbursed Taka 192.46 crore loans for the implementation of 11 poverty alleviation credit programmes in different northern districts till June last.
   RAKUB recovered Tk 131.39 crore loans till the same time, sources at the bank said.
   Some 1.96 lakh marginal, small and poor farmers and unemployed and distressed people are the beneficiaries of the projects as the projects has given them opportunities to involve in various income-generating activities.
   The bank provided mortgage-free maximum loan of Tk 10,000 to 95,409 under the ‘self-reliance (shanirvor) credit programme’ for agro-products processing, horticulture, forestation, fish culture and animal husbandry in 110 unions under nine districts.
   Without any mortgage, the ‘RAKUB self-help credit programme’ is being operated in all the northern districts except Kurigram, through which the beneficiaries are being provided maximum credit of Tk 15,000 for crop production, poultry farms, small business and rural transportation.
   The bank is operating ‘crop storage credit programme’ through its 16 branches in eight districts.

Japan said Friday that it could lose part of its stake in a project to develop Iran’s largest onshore oil field amid a deadlock in talks and possible sanctions on Tehran over its nuclear program.
   Media reports said Iran had told Japan it would have only a 10 per cent stake in the Azadegan oil field, not the 75 per cent agreed to when the two countries signed the two billion-dollar deal in 2004.
   ‘The talks are continuing over the overall framework of the development but changes are possible,’ Japanese Trade and Industry Minister Akira Amari said when asked about the reports.

The world’s second largest bank raised the possibility that it could move its head office to another country, said a British newspaper quoting a senior HBSC official.
   A senior HBSC official admitted to The Guardian that the UK may no longer be an attractive place to be based for tax
   purposes.
   The British-based bank shifted its headquarter from Hong Kong in 1993 when it took over the troubled Midland bank. Each year it pays more than £370m into the chancellor’s coffers.
   The bank candidly said that it is reviewing the location of its head office every three years but has so far concluded it should stay in the UK, illustrated by the construction of a new tower in London’s docklands.
   The next review is expected in six months’ time and will be closely watched by international companies.

World oil prices dropped back below 60 dollars per barrel on Friday with some analysts believing that the OPEC cartel was unlikely to hold an emergency meeting to consider production cuts.
   New York’s main contract, light sweet crude for delivery in November, declined 21 cents to 59.82 dollars per barrel in electronic deals before the official opening of the US market.
   In London, Brent North Sea crude for November delivery lost 23 cents to 59.77 dollars per barrel in electronic trading.

The prime minister, Manmohan Singh, warned Friday that India’s financial markets must become more competitive and efficient to boost investment and help meet the government growth targets.
   ‘If we are to achieve our growth ambitions of 8-10 per cent, we need investments of a high order,’ Singh said at the opening of new corporate headquarters of market regulator the Securities and Exchange Board of India.
   ‘This is possible only by making our financial markets more efficient, competitive and global,’ Singh added.

Microsoft confirmed on Thursday that its soon-to-be-released Vista operation system was designed to cripple pirated copies.
   A beefed-up ‘Software Protection Platform’ partially disabled illegitimately obtained Windows Vista or Windows Server ‘Longhorn’ programs, according to the Redmond, Washington, software giant.
   The anti-piracy feature switched unauthorized copies to a ‘reduced functionality mode’ and routed users to a website explaining the situation and how to remedy it, most likely by paying for the software.
   ‘Microsoft anti-piracy technologies cannot and will not turn off your computer,’ Cori Hartje, director of the company’s Genuine Software Initiative, explained in a release.
   ‘Reduced functionality mode in Windows Vista will allow the user to use the browser.’
   The Vista security feature was a more disabling version of one on the operating system’s predecessor, Windows XP, according to Microsoft.
   When the anti-piracy software spies illegitimate copies of Vista or Longhorn it alters them to a ‘non-genuine state’ that requires the user to reactivate the program.
   ‘At no point will a user lose access to his or her personal data based on the genuine program, nor is personal data ever transferred to Microsoft,’ the company said.
   ‘However, it will be obvious to a user, and anyone else viewing the PC, that the PC experience is not equivalent to that of a user running a genuine copy of Windows Vista.’
   Vista’s release had been delayed while engineers tuned the software and it was on track to be released early next year.
   Microsoft estimated that one in five copies of its Windows software on computers worldwide was stolen, unlicensed or counterfeit. Windows programs run approximately 90 per cent of computers.
   The Business Software Alliance reported in May that 35 per cent of computer software used worldwide was pirated. The alliance estimated the value of the illicit software at more than 35 billion dollars.

The Asian Development Bank said Friday it plans to provide Vietnam with three billion dollars in assistance from next year to 2009 if the communist country maintains its economic reform course.
   ADB country director Ayumi Konishi said concerns remain in some areas, including anti-corruption efforts and the pace
   of equitising state-run enterprises and reforming the financial sector. ‘Our ambitious assistance plan really reflects our expectations and our hope that the government will address all these concerns in a satisfactory manner,’ Konishi told a Hanoi media briefing.
   He stressed that the loans and grants earmarked for public works and other projects under the ADB’s ‘business-led and pro-poor’ strategy are ‘not our commitment yet but an expression of our preparedness.’

The dollar rose on Friday as the market awaited the release of key US employment data.
   The euro fell to 1.2677 dollars in early European trading from 1.2691 dollars late in New York on Thursday.
   The dollar firmed to 118.08 yen from 117.63 yen late on Thursday.
   Wall Street analysts expect Washington to announce later on Friday that US non-farm job growth of 120,000 positions in September after payrolls rose by 128,000 in August.
   ‘Although we expect US payrolls to come in below the consensus forecast we are not convinced that the dollar will come under pressure today,’ BNP Paribas analysts said.
   ‘On the other hand a reading in line with the consensus or even higher is likely to spark a dollar rally and push equity markets up to even higher levels,’ they added.
   The euro, meanwhile, has reacted little to the European Central Bank’s decision on Thursday to raise, as expected, interest rates and an accompanying press conference that confirmed market expectations for a further increase before year-end, probably December.
   ‘Market expectations of a further ECB rate hike in December were sustained,’ HBOS analyst Steve Pearson said.
   The yen weakened against the dollar with players reluctant to take positions ahead of the weekend given North Korea’s threat to carry out a nuclear test, dealers said.
   Westpac Banking Corp chief currency strategist Robert Rennie in Sydney said concerns over North Korea were putting traders off Asian currencies.
   ‘Being anywhere near the Korean peninsula this weekend is not something the foreign exchange market relishes. The yen is underperforming in that situation,’ he said.
   Japanese officials said they were not ruling out the chance of North Korea carrying out its threatened nuclear test as soon as this weekend, when Japan’s new Prime Minister Shinzo Abe heads to China and then South Korea.
   The euro was changing hands at 1.2677 dollars against 1.2691 dollars on Thursday, 149.69 yen (149.31), 0.6761 pounds (0.6753) and 1.5897 Swiss francs (1.5890).
   The dollar stood at 118.08 yen (117.63) and 1.2542 Swiss francs (1.2516).
   The pound was being traded at 1.8747 dollars (1.8790).
   On the London Bullion Market, gold prices slipped to 571.70 dollars per ounce, from 573.30 dollars late on Thursday.

The Chittagong branch of Commercial Bank of Ceylon Ltd has recently launched a special product for teenagers as a part of its unique and innovative service.
   The product titled – ‘Dot Com Teen Saver Account’ – is specially designed to encourage school going children to save and learn banking knowledge from an early age.
   Dot Com offers 2 per cent higher interest rate on savings than the normal savings account.
   The bank will provide free ATM cards to children with withdrawal limits to restrict high spending by them.

After marathon overnight talks, EU and US negotiators clinched a deal Friday allowing more US law enforcement agencies to have access to data about air travellers heading to the United States.
   ‘We have a new interim passenger name record agreement and this will replace the earlier agreement from 2004 that was annulled,’ announced Finnish justice minister Leena Luhtanen, whose country currently holds the EU presidency.
   ‘This new agreement will provide the possibility of giving data to the US authorities while guaranteeing sufficient data protection,’ she told reporters in Luxembourg, after nine hours of video conference talks between negotiators.
   The United States has been demanding that more of its law enforcement agencies have access to personal details about travellers headed to US airports to better combat terrorism.
   The lack of an agreement has left the airlines in an uncomfortable legal limbo, with some airlines now asking passengers for permission to forward the information.
   The data—including credit card, passport and telephone details—is currently sent to the US customs authorities, but the Department of Homeland Security wants it to be shared with other anti-terror agencies, including the FBI.
   Under the old agreement, aircraft leaving the EU for US airports had to provide more than 30 pieces of data about passengers at least 15 minutes before departure, or face being diverted and the possibility of heavy fines.
   The new deal will see the same data being made available to US customs authorities, who will then be able to pass it on under certain conditions and if privacy requirements are respected.
   ‘We are not talking about more data or more exchanges, we are talking about making easier transmitting data to agencies,’ EU Justice Commissioner Franco Frattini said.
   He said the agreement would avoid having a series of potentially disastrous bilateral accords between the Union’s 25 members and the United States.
   ‘It would have been a great risk for Europe, for security and for the privacy of European citizens,’ he said. ‘We couldn’t have kept the proper level of privacy protection.’
   The new deal also ensures that the data will be ‘pushed’ to US customs when they make a request, rather than allowing the agency to ‘pull’ the information off airline computers.
   Frattini said first tests on the push system would be conducted before the end of the year.
   The agreement is only temporary and is set to expire in July 2007. In the meanwhile negotiators will continue to draw up a more comprehensive and permanent deal.
   The 2004 deal was annulled by Europe’s top court in May following a complaint based on privacy concerns.
   It made no objection about what was actually contained in the agreement—it did not even examine the contents of the deal—but ordered the two parties to come up with a new legal framework by September 30.

The economy probably slowed considerably in late summer, reflecting a slumping housing market, a White House economic official said Thursday.
   Allan Hubbard, director of the National Economic Council, predicted the pace of growth from July through September could range from 1 per cent to 2 per cent.
   The Bush administration’s fresh observations on the economy come with the election season in high gear, and a day before the president was due to appear at a FedEx Express facility in the Washington area to promote his economic policies. Voters’ choices at the polls on Nov. 7 are likely to be shaped in part by how they are faring economically. The administration says Americans are mostly better off, while Democrats disagree.
   Among those surveyed in an AP-Ipsos poll in early October, people trusted Democrats to do a better job of handling the economy than Republicans.
   Hubbard spoke in stark terms about the ‘big choice’ before voters on Election Day and took several shots at Democrats in advance of Bush’s event Friday, which was billed as official and not political.
   ‘For them to talk about that they are going to provide fiscal responsibility — more fiscal responsibility than the president — is absolutely ridiculous,’ Hubbard said of the Democrats.
   The government will release its first estimate of economic growth for the third quarter on Oct. 27.
   The National Association for Business Economics is forecasting that the economy will expand at a 2.6 per cent rate in the third quarter. But other economists think the growth rate will be closer to 1 per cent, the low end of Hubbard’s prediction.
   The magnitude of the economy’s slowdown will hinge in large part on how much altitude the once high-flying housing market loses.
   Federal Reserve Chairman Ben Bernanke on Wednesday said a ‘substantial correction’ was taking place in the housing sector. He estimated the housing slowdown would trim about 1 per centage point off economic growth in the second half of this year.
   But the fallout from the cooler housing market should be cushioned by other positive factors, including good job creation and income growth, Bernanke said.
   The economy grew at a 2.6 per cent pace from April through June, compared with a 5.6 per cent pace over the first three months of the year, which was the strongest spurt in 2 ½ years.
   For all of 2006, Hubbard believed the economy will have grown by about 3 per cent, a respectable performance according to economists.

US companies bedazzled by low-cost economies fail to take account of the abysmal productivity offered by workers in countries like Mexico and China, a business group said.
   The Conference Board said its study, the first by a private-sector group to analyse standardised labour costs globally, was a ‘critical lesson’ to Western firms seeking to cash in on the cheap labour of emerging countries.
   Fast-growing economies in China, India and eastern Europe do enjoy a comparative advantage over the United States, the research organisation said.
   But it said that advantage is narrowed once a full account is taken of unit labour costs, which measure the standard unit of output per worker across economies.
   Bart van Ark, director of the Conference Board’s international economic research programme, said that unless workers in poorer countries raise their productivity in step with wage gains, ‘the ‘cost advantage’ begins to erode’.
   ‘The key for emerging economies is to promote productivity through technological change and innovation to match wage increases which will undoubtedly happen in a rapidly growing economy,’ he said.
   The Conference Board highlighted Mexico, a top destination for US investment which loses nearly all its competitive advantage if productivity is factored in.
   Mexico’s total wage costs were 11 per cent of the average US level in 2002. But because Mexican workers produce 10 times less than Americans per hour, the unit labour costs came out nearly the same.
   India and China enjoy the biggest comparative edge because their wages are so low — less than three per cent of the level paid to US workers in manufacturing.
   Even with lower worker productivity factored in, unit labour costs in India and China are on average 80 per cent lower than those in the United States.
   But the report also noted that those averages were for all manufacturing companies. US and other foreign companies typically pay their local workers much more than domestic ones.
   Newer, poorer entrants to the
   Union such as the Czech Republic, Hungary and Poland have seen their comparative advantage wane as wages have risen faster than their workers’ productivity.
   In Poland, for instance, industrial workers earn about 13 per cent of the average US salary but their unit labour costs come out much higher at 73 per cent.
   ‘These differences underscore the challenge that even very low-wage countries have in fostering productivity growth that keeps pace with or exceeds rising wage levels to preserve their relative global competitive position,’ van Ark said.

Google Inc has accelerated its efforts to sell advertising for magazines and newspapers while continuing to gear up for potentially lucrative opportunities in broadcasting and mobile devices, chief executive officer Eric Schmidt said Thursday.
   Schmidt updated a small group of reporters on the online search engine leader’s expansion beyond the Internet during a casual lunch that also was attended by Google co-founders Larry Page and Sergey Brin.
   The triumvirate touched upon a wide range of subjects, but questions about Google’s finances or the current state of the Internet advertising market were forbidden because the company just completed its third quarter.
   Internet powerhouse Yahoo Inc last month warned its advertising growth slowed late in the quarter, raising investors’ curiosity about Google’s results, which are scheduled to be released Oct 19.
   Besides touching upon Google’s ambitions in new advertising markets, the company’s brain trust also emphasized the company’s plans to sculpt its hodgepodge of technology products into a more cohesive unit revolving around its search engine.
   ‘We don’t want people to have to learn about 20 different products that work in 20 different ways,’ Brin said. ‘I was even getting lost.’
   In his comments, Brin also hinted that Google may tweak its technology so online videos appear on the first page of responses to search requests.
   ‘Often times in research, video can be a very good answer to a question,’ said Brin, who cited requests about lock-picking and diving as examples. When asked if Google planned to change its algorithms to list videos as possible solutions, Brin said, ‘It’s an oversight that it’s not true today.’

More top US chief executive officers believe the economy is going to deteriorate over the next six months than expect improvement, according to a study of 70 top CEOs released on Thursday.
   A joint study by the Business Council and the Conference Board found that 45.6 per cent of top CEOs forecast economic conditions to get worse over the next six months, while 41.2 per cent believe conditions will improve. That marks the first time in the survey’s two-year history that the largest segment of respondents expected conditions to deteriorate and is a sharp increase from the 16 per cent of respondents in February who saw conditions worsening.
   ‘Results ... show increased caution about the US and global economies and concern about profit growth,’ Kenneth Chenault, vice chairman of the group and chairman and CEO of American Express Co., wrote in a preface to the study.
   The findings suggest the volatile energy prices, rising interest rates and cooling US housing market of the past year are beginning to take a toll on business.
   The survey found that 71.4 per cent of CEOs expect the US economy to grow at a rate of 2.1 per cent to 3 per cent next year, with 24.3 per cent expecting growth of 2 per cent or less.
   ‘Two to three per cent (GDP) growth is actually not only quite acceptable but maybe in the
   long run has a better probability of being sustained than something else,’ said Clayton Jones, chairman, president and chief executive officer of cockpit
   electronics maker Rockwell Collins Inc.
   Oil prices—which affect companies directly through the cost of energy to run factories as well as influencing consumer spending through gasoline prices—have fluctuated widely over the past year.
   On Thursday, US oil futures CLc1 bounced back from an eight-month intraday low of $57.45 per barrel after officials of the Organisation of Petroleum Exporting Countries said they would cut output as soon as possible in the face of sliding prices. Oil futures hit a record high above $78 in July.
   The Federal Open Market Committee this summer took a break from a campaign of 17 consecutive interest rate hikes that lifted the benchmark federal funds target rate to 5.25 per cent and again in a meeting last month decided to hold rates steady, saying inflation risks should abate as economic growth slows.
   The survey found CEOs were particularly cautious about prospects in their own industries, with only 14 per cent of respondents expecting conditions in the sectors they compete in to improve over the next six months, down from the more than 40 per cent that expected growth in their sectors in February.

The International Monetary Fund on Thursday welcomed Indonesia’s announcement that it would repay all its debts to the organization early.
   ‘We welcome this announcement,’ IMF spokesman Masood Ahmed told reporters after the announcement in Jakarta.
   ‘We think this repayment reflects the strength of the recovery in Indonesia, reflects the strong balance of payments position and we continue to look forward to a close relationship and a dialogue with authorities, not only on the economic issues in Indonesia but also on economic issues in the region and the world.’
   Officials said earlier in Jakarta that the remaining 3.2 billion dollars in IMF debts would be repaid as early as next week after a recovery in its foreign exchange reserves
   Earlier, Bank Indonesia reported that its foreign exchange reserves rose to 42.35 billion dollars at the end of September from 42 billion at the end of August.

British aerospace giant Rolls-Royce said Friday that it had suspended production of its Trent 900 jet engines for 12 months owing to fresh delays to the Airbus A380 superjumbo.
   The Trent 900 was created especially for the Airbus A380, which will be the world’s biggest commercial passenger jet when it finally enters service.
   Deliveries of the A380 superjumbo jet will be delayed by another year on average, the program’s third setback since June 2005, Airbus parent company EADS had said Tuesday.
   A Rolls spokesman meanwhile told AFP on Friday:
   ‘Yesterday we informed our employees that following the Airbus announcement on Tuesday we have suspended production of the Trent 900 for about 12 months because obviously we don’t need to be building engines if Airbus is not building aircraft.’

European Central Bank President Jean-Claude Trichet said he did not want to change the market’s expectations that the key eurozone interest rate would rise to 3.50 per cent by the end of the year.
   The ECB on Thursday raised its key interest rates, increasing the minimum bid rate on its main refinancing operations from 3.00 per cent to 3.25 per cent, the highest level in five years.
   ‘I said it yesterday in a way that I think was clear to all of the people listening to my press conference that I don’t want to change current expectations between now and the end of the year,’ he told France’s Europe 1 radio.

Leading American economist Milton Friedman has again lambasted Hong Kong for abandoning laissez-faire economics, mourning Friday ‘the death of the policy on which the territory’s prosperity was built’.
   The 94-year old Nobel Prize winner’s attack in an editorial of the Wall Street Journal follows similar comments made last week after Hong Kong leader Donald Tsang said the government no-longer had a hands-off approach to the economy.
   ‘It had to happen. Hong Kong’s policy of ‘positive non-interventionism’ was too good to last,’ the senior research fellow at Stanford University’s Hoover Institute wrote.
   Friedman had long been one of Hong Kong’s most vocal champions. In 1990 he declared: ‘If you want to see how the free market really works, Hong Kong is the place to go.’
   His latest comments reflect growing concerns here that the southern Chinese territory is moving away from the economic blueprint that many believe brought it great wealth in the past 30 years.
   Such worries were sparked by off-the-cuff remarks by Tsang after a seminar in which government and business leaders discussed how to integrate Hong Kong with China’s latest five-year economic plan.
   Tsang said the policy of so-called ‘positive non-intervention’—in which the government intervenes sparingly in the economy—was over.
   In his article, Friedman said the policy had enabled Hong Kong’s economy to grow at staggering rates since the end of World War II.
   ‘That was a striking demonstration of the productivity of freedom, of what people can do when they are left to pursue their own interests,’ he wrote.
   ‘Although the territory may continue to grow, it will no longer be such a shining symbol of economic freedom.’

Former Hewlett-Packard Co chairman Patricia Dunn surrendered at a Silicon Valley courthouse on Thursday afternoon on felony charges for spying on reporters and company directors.
   Superior Court Judge Alfonso Fernandez released Dunn, who is due to start treatment for ovarian cancer on Friday, on her own recognizance after a three-minute hearing.
   Dunn sat quietly in the courtroom after arriving about 20 minutes early, speaking a single word, ‘Yes,’ when asked if she agreed to return for arraignment on November 17.
   Her surrender and appearance in front of the judge is the latest development in a boardroom leak scandal that has tarnished the reputation of a company that has previously championed privacy and aspired to a code that its founders called the ‘HP Way.’
   In HP’s probes, investigators impersonated company board members, employees and journalists to get their private telephone records.
   Dunn, who resigned last month and appeared last week before Congress to testify about the investigation, has said she regrets the way the probe was handled, but does not accept personal responsibility for any deceptive tactics used.
   California attorney general Bill Lockyer filed charges on Wednesday against Dunn and four other defendants because of tactics used in HP’s effort in 2005 and 2006 to find the source of leaks to the media.
   Dunn, repeating a portion of her congressional testimony, told the ‘60 Minutes’ news magazine television show in an interview to be broadcast on Sunday that to think other companies do not pursue investigations would be unwise.

Hedge fund usually refers to private investment vehicles that seek above-average returns through active portfolio management. The first ever hedge fund started in New York on 1 January 1949 founded by Alfred Winslow Jones to sell short some stocks while buying others and thus some of the market risk was hedged. Generally, a hedge fund is a lightly regulated private investment fund and restricted by law to no more than 100 investors with minimum contribution of $1million. Hedge fund is a private pool of investment capital organized into a limited partnership to invest in a portfolio made up of a variety of securities. Hedge funds are subject to the terms of an investment agreement entered into by the sponsor of, and investors in, the hedge fund. When the stock market is doing poorly, talk of using hedge funds tends to increase. Although hedge funds are not mutual funds, people often mistake them as such. The word “hedge” implies defensive management or insurance against bad times.
   Hedge fund is a fund that can take both long and short positions, use arbitrage, buy and sell undervalued securities, trade options or bonds and invest in almost every opportunity any where in the market it foresees impressive gains at reduced risk. Hedge funds are similar to private equity funds, such as venture capital funds, in many respects. Most hedge funds invest in very liquid assets, and permit investors to enter or leave the fund easily.
   Function of hedge funds in the context of our capital market in Bangladesh is insignificant and not popular of course. Popularity at this stage of our market condition is also not expected. What we require in the first place is the tools/ vehicles without which investors can never taste the sweetest fruits from their investment in this fund and effective hedge fund activities or popularity of this fund shall never come true and remained a nightmare until and unless the tools i.e., option, derivatives are introduced into our capital market. Presently, some activities of hedge funds are apparent in our market though these are almost restrained within few banks only. But application of different hedge funds towards our market shall not only attract mass investors (institutional and retail) but also bring in desired depth and ensure potential growth of our market in the near future which is much awaited.
   Hedge funds tend to be skill-based investment strategies that attempt to obtain returns based on the unique skill or strategy of the trader. These returns are considered absolute as they do not depend on the relative long-term return of underlying traditional stock and bond markets. The primary aim of most hedge funds is to reduce volatility and risk while attempting to preserve capital and deliver positive returns under all market conditions.
   For a variety of reasons investors are attracted to hedge funds. This includes their potential to deliver positive returns under all market conditions, low correlation to traditional asset classes and access to highly specialized strategies not typically available through traditional money management.
   Hedge funds are offered as private investment partnerships. This offer is generally availed by fewer than hundred affluent investors or institutional clients though all hedge funds are not appropriate for all prospective investors. Most hedge funds are available only to persons who meet specific financial requirements. Prior to investment, the law requires that the hedge fund determine the investor’s suitability whether it is appropriate to the investor’s risk tolerance, investment goals, and investment experience.
   Friends, family, colleagues, relations and many others can be the potential pools of capital for hedge fund. This is the most promising source of capital and is the only sure way of raising money. But this does not guarantee that one can build real critical mass in the fund of funds business, even if a lot of very rich people are known. High net worth and retail can be the potential pools of capital for hedge fund.
   This market is extremely difficult to reach without a big marketing budget or relationship with a private bank or broker dealer, which might put a fund of funds on a recommendation list. Even these relationships have a habit of disappointing unless the broker dealer, for example, has a real incentive to sell the fund. Institutional investors are other potential pools of capital for hedge fund.
   The author is the In-Charge of R&D & Information Department of Dhaka Stock Exchange (DSE).
   Many fund of funds start out with ambitious plans to tap into their institutional rolodex. It is likely to prove a frustrating experience because pension funds and insurance companies take months, if not years, to make a hedge fund allocation and normally eventually opt for a fund of funds that has an institutional look and feel. Until recently, this was a fairly unpromising market as many family offices felt that they could manage their hedge fund investments on their own. Many wealthy families are now changing their minds and deciding that the universe of hedge funds is now so large that they can’t do it on their own. Some families are turning to fund of funds to manage specialist elements of their hedge fund allocations. However, none of these pools of capital is easy to access, not even the friends, family and colleagues. They will often talk a great game and promise to invest in the fund but somehow the money never arrives. The only solution is to sharpen the marketing edge and if the goal is to target the institutions, to look at creative approaches.
   Hedge funds are like mutual funds in two respects-they are pooled investment vehicles (i.e. several investors entrust their money to a manager) and they invest in publicly traded securities. But there are important differences between a hedge fund and a mutual fund which in details are being discussed.
   Mutual funds are public investment vehicles. A public pool of investment capital organized to invest in a portfolio composed of often predetermined type of securities and available to the general public. They are registered under the SEC while hedge funds are private investment vehicles and lightly regulated. Investors in mutual funds are not limited and can purchase many funds. Usually small minimum investments are required for mutual funds. The only qualification for investing in a mutual fund is having the minimum investment to open an account with a fund company, which is typically around $1,000 but can be lower. After the account has been opened, there is generally no minimum additional investment required and many fund investors contribute relatively small amounts to their mutual funds on a regular basis as part of a long-term investment strategy. The typical fund investor is a middle-income, middle-aged individual. In the case of hedge funds, investors are limited (limited partners) who can invest in any one fund. A minimum investment of $1 million or more is often required of hedge fund investors. Investors in hedge funds must be accredited investor i.e. net worth must exceed $1 million or individual income must have been in excess of $200,000, or joint income must have been in excess of $300,000 in the past two years, plus investor must expect the same level of income in the current year. In down markets some funds of mutual funds are defensively managed and others, like index funds, hold during bad markets. Most hedge fund strategies try to hedge against downturns in the markets, but effectiveness depends on the fund. In mutual funds, a maximum 30% of profits can be taken from short sales while manager of the hedge funds may short sell often. Limits of fees on mutual funds are imposed by the SEC. But there are no limits on the fees a hedge fund adviser can charge its investors. Typically, the hedge fund manager charges an asset-based fee and a performance fee. Some have front-end sales charges, as well. Hedge funds typically charge high fees, usually a combination of 1-% of assets plus a percentage of the profits (usually 10-20%). Mutual funds are required to value their portfolios and price their securities daily based on market quotations that are readily available at market value and others at fair value, as determined in good faith by the board of directors. In addition to providing investors with timely information regarding the value of their investments, daily pricing is designed to ensure that both new investments and redemptions are made at accurate prices. Moreover, mutual funds are required by law to allow shareholders to redeem their shares at any time. But there are no specific rules governing hedge fund pricing. Hedge fund investors may be unable to determine the value of their investment at any given time.
   A primary advantage of hedge funds is the low correlation many strategies have to traditional investments. While past performance is not indicative of future results, hedge fund strategies historically offer returns independent from the performance of stock and bond markets. In fact, they aim to diversify away from traditional long-only equity strategies and deliver positive returns under all market environments. Many hedge fund strategies have the ability to generate positive returns in both rising and falling equity and bond markets. Advantages of hedge fund can be - inclusion of hedge funds in a balanced portfolio reduces overall portfolio risk and volatility and increases returns. Huge variety of hedge fund investment styles – many uncorrelated with each other – provides investors with a wide choice of hedge fund strategies to meet their investment objectives. Academic research proves hedge funds have higher returns and lower overall risk than traditional investment funds. Hedge funds provide an ideal long-term investment solution, eliminating the need to correctly time entry and exit from markets. Adding hedge funds to an investment portfolio provides diversification not otherwise available in traditional investing. Hedge funds utilize a variety of financial instruments to reduce risk, enhance returns and minimize the correlation with equity and bond markets. Many hedge funds are flexible in their investment options (can use short selling, leverage, derivatives such as puts, calls, options, futures, etc.). Hedge funds vary enormously in terms of investment returns, volatility and risk. Many, but not all, hedge fund strategies tend to hedge against downturns in the markets being traded. Many hedge funds have the ability to deliver non-market correlated returns and many have as an objective consistency of returns and capital preservation rather than magnitude of returns. Most hedge funds are managed by experienced investment professionals who are generally disciplined and diligent. Pension funds, endowments, insurance companies, private banks and high net worth individuals and families invest in hedge funds to minimize overall portfolio volatility and enhance returns. Most hedge fund managers are highly specialized and trade only within their area of expertise and competitive advantage. Hedge funds benefit by heavily weighting hedge fund manager’s remuneration towards performance incentives and thus attracting the best brains in the investment business. In addition, hedge fund managers usually have their own money invested in their fund. Another advantage of hedge funds is that they are not limited by the same rules that apply to mutual funds, such as the requirement to limit any individual stock to not more than 10% of the total portfolio – the concentration issue.  This concentration may also have a negative effect if the hedge fund manager makes a large bet on a single holding and it decreases in value.
   How hedge funds are advantageous over mutual funds can be discussed at this stage. Hedge funds are extremely flexible in their investment options because they use financial instruments generally beyond the reach of mutual funds, which have SEC regulations and disclosure requirements that largely prevent them from using short selling, leverage, concentrated investments, and derivatives. This flexibility, which includes use of hedging strategies to protect downside risk, gives hedge funds the ability to best manage investment risks. The strong results can be linked to performance incentives in addition to investment flexibility. Unlike many mutual fund managers, hedge fund managers are usually heavily invested in a significant portion of the funds they run and share the rewards as well as risks with the investors. Incentive fees remunerate hedge fund managers only when returns are positive, whereas mutual funds pay their financial managers according to the volume of assets managed, regardless of performance. This incentive fee structure tends to attract many practitioners and other financial experts to the hedge fund industry.
   Hedge funds because of the risks involvement are not suitable for all investors. It carries a high degree of risk, liquidity is limited and they usually employ leverage and the use of derivatives.  Anyone considering a hedge fund should carefully determine if they are suitable for such an investment.  Investors shouldn’t forget that past results are not necessarily indicative of future results. Potential hedge fund investors should proceed with extreme caution and try to stick with hedge funds that have been around for a while. Because investors certainly don’t want to invest with a company that has opened and closed many hedge funds. Lack of regulation, bad liquidity and high fees are other issues that should be considered. Above all, investors shouldn’t put all their money into hedge funds. There is a compelling argument for the inclusion of hedge funds in a traditional investment portfolio. Many hedge funds can offer enhanced portfolio performance under various market conditions. It is hedge fund manager’s flexibility and skill-based strategies that make this investment class inherently attractive. One of the primary advantages of hedge funds is that they have a performance-based fee schedule.  The typical hedge fund has a fixed percentage-of-assets fee, usually 1% - 2% annually, plus an incentive fee of 10% to 20% of profits.  This means that the goals of the manager and the investor are aligned, since the manager makes much more if his fund is profitable. However, investors need to approach these investments with the necessary information to make an informed decision. Researching and evaluating hedge funds presents a host of challenges to even the most sophisticated investor. Through an appropriate allocation, hedge funds can be an attractive addition to a well-diversified portfolio designed to deliver positive returns while attempting to reduce volatility and risk.
   The author is the In-Charge of R&D & Information Department of Dhaka Stock Exchange (DSE).

IMF lifts financial embargo on Liberia
The International Monetary Fund has taken Liberia off financial probation, paving the way towards debt relief for the west African country emerging from a civil war, the global financier said Thursday. Liberian authorities ‘have committed to further strengthening cooperation with the IMF in terms of both policy and continued payments,’ said John Lipsky, the IMF’s first deputy managing director, in a statement. ‘These actions could pave the way for Liberia to benefit from debt relief’ under IMF initatives, he said. The restriction, termed non-cooperation declaration, in place since 1990 shortly after civil war broke out, was lifted in recognition of the government’s financial performance, which the IMF rated as ‘encouraging’.
— AFP

Mittal closing
two US plants
The US unit of world number one steelmaker Arcelor Mittal said Thursday it was shutting two US blast furnaces due to ‘reduced levels of demand for light flat-rolled products.’ Mittal Steel USA said it was indefinitely idling the furnaces in Cleveland, Ohio and East Chicago, Indiana. ‘While the furnaces are off line, required maintenance will be performed,’ the company said. ‘The furnaces will be reactivated when market conditions warrant increased production levels. No employees will be laid off.’ The company headed by Lakshmi Mittal was formed when Mittal Steel swallowed Arcelor in a 32-billion dollar (25-billion-euro) deal in July after a bruising half-year battle to acquire the
company.
— AFP

Goodyear Tire workers strike
Goodyear Tire plants were emptied in the United States and Canada on Thursday after workers went on strike to prevent further plant closures, the United Steelworkers union said. The strike could interrupt production at auto plants across North America as Goodyear supplies tires to most automakers on a just-in-time delivery plan. ‘The company left us with no option,’ Steelworkers executive vice president Ron Hoover said in a statement. ‘We cannot allow additional plant closures after the sacrifices we made three years ago to help this company survive.’
— AFP